Thank you for allowing Pfizer the opportunity to respond to the proposed rules, as required by the Sarbanes-Oxley Act of 2002 in Section 402 Disclosures in Periodic Reports, that would require a company to disclose, in management's discussion and analysis, all off-balance sheet transactions, arrangements, obligations, contingent obligations and other relationships with unconsolidated entities that have or may have a material effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Pfizer is a research-based global pharmaceutical company that discovers, develops, manufactures, and markets innovative medicines for humans and animals. For 2001, total revenues and assets exceeded $32 billion and $39 billion, respectively.

Pfizer recognizes the need of the U.S. Securities and Exchange Commission (SEC or Commission), and as now required under the Sarbanes-Oxley Act of 2002, to improve the transparency of off-balance sheet arrangements and to thereby improve investor understanding and confidence in a company's current and future financial position. Investors' understanding of and confidence in companies that utilize off-balance arrangements has surely been impacted by a number of recent accounting and disclosure scandals, and we commend the Commission for its efforts to propose meaningful solutions.

We believe that Release No. 33-8144 may help form the basis for an important improvement in the quality and transparency of corporate disclosure. However, we believe that certain aspects of the proposed disclosures may be not practicable to implement and may ultimately harm the competitive business practices of a company, thereby ultimately causing more injury to shareholders than benefit. As a result, there are some aspects of the suggested disclosures about which we cannot fully support, but, in keeping with the spirit of the Release, we have offered alternative solutions where possible.

Specifically,

We strongly believe that the proposed "remote" disclosure threshold is too broad and will result in the unnecessary disclosure of off-balance sheet arrangements as management will not be able to reasonably assess whether the effect of such arrangements would be remote. We would strongly recommend maintaining the current "reasonably likely" disclosure threshold as this well-established requirement provides management the ability to properly evaluate the likelihood and impact, and therefore the disclosure, of such arrangements.

We believe that the definition of off-balance sheet arrangements is too broad as it will require management to evaluate the off-balance sheet arrangements of an unconsolidated entity (e.g. a special purpose entity). Depending on the structure or ownership interest of such entities, management may not be able to obtain such discrete information nor be able to evaluate the potential effect such an arrangement may or may not have on the entity. While the intention to evaluate the risks associated with the unconsolidated entity has merit, we believe that this level of evaluation is not practical nor will it provide the reader increased transparency as the information does not directly effect the reporting company.

We share the same purpose of the SEC - - that of maintaining and strengthening the integrity, quality and transparency of financial statements - - even as we challenge some of the details in the SEC's proposal.

Our more specific comments to several of the items in the proposal are set forth in the attachment.

We appreciate your consideration of these comments. We would be happy to discuss these matters further or to meet with you if it would be helpful.

Sincerely,

Loretta V. Cangialosi

Loretta V. Cangialosi
Vice President and Controller
Pfizer Inc.

Enclosure (1)

cc:

David L. Shedlarz
Executive Vice President and Chief Financial Officer

Alan G. Levin
Vice President - Finance

Attachment

Detailed Responses to the Proposed Rules on Disclosure in Management's Discussion and Analysis about Off-Balance Sheet Arrangements, Contractual Obligations and Contingent Liabilities and Commitments

The SEC solicits comment on off-balance sheet arrangements:

Have we appropriately tailored the proposed definition of the term "off-balance sheet arrangement" and the proposed disclosure to filter out disclosure that is unimportant to investors? If not, how should we change the proposed definition or disclosure requirements?

We recommend the definition of an "off-balance sheet arrangements" exclude the phrase, "whether or not a party to the arrangement" as this will require management to evaluate the off-balance sheet arrangements of an entity (e.g. a special purpose entity) for which it may not be able to obtain such discrete information nor be able to evaluate the potential effect such an arrangement may or may not have on the entity. While the intention to evaluate the risks associated with the unconsolidated entity has merit, we believe that this level of evaluation is not practical. In addition, we recommend that the proposed criteria for determining the existence of an off-balance sheet arrangement be revised as follows:

Derivatives to the extent that the fair value thereof is not fully reflected as a liability or assets in the financial statements

We recommend that certain contracts, as identified in paragraph 10 of SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, be excluded from the criteria, as these instruments have been identified as having fair values which are not easily determinable or other values which are deemed satisfactory.

We agree with requiring disclosure only upon an unconditional binding definitive arrangement or the settlement.

We believe the SEC's objective of providing, through expanded disclosure requirements, a greater understanding of a company's off-balance sheet arrangements, an ability to understand how significant aspects of its business are conducted and the quality of a company's earnings and risks, can be achieved by making the following change to proposed Item 303 (a)(4)(i):

"...Disclose the following items to the extent necessary to an understanding of the effect of the off-balance sheet arrangements that currently have, or may in the future, a material effect on the registrant's financial condition, changes in financial condition, results of operations, revenues or expenses, liquidity, capital expenditures or capital resources:" We recommend this change in the definition as we are concerned that the effects of off-balance sheet arrangements which may be greater than remote, but not material to an entity, will fall under the existing definition.

Is the proposed definition too narrow? If so, how should we change it to include other off-balance sheet arrangements that are significant to investors?

No. We believe the proposed definition, as amended, will capture those arrangements that currently have, or may in the future have, a material effect on the company's financial condition, changes in financial condition, results of operations, revenues or expenses, liquidity, capital expenditures or capital resources.

Is the proposed definition of an "off-balance sheet arrangement" sufficiently clear to enable registrants to determine which derivative instruments are included in the proposed disclosure requirements and which are not?

We are concerned about the inclusion of off-balance sheet arrangements to which the registrant is not a party. Implementation of such a requirement may simply not be practicable.

Is it appropriate to apply our existing policy of excluding preliminary negotiations from MD&A disclosure to off-balance sheet arrangements?

Yes. We believe that the very nature of "preliminary negotiations," in light of the proposed requirements, could require an indeterminable number of situations requiring disclosure and, therefore, continuing the exclusion of preliminary negotiations is appropriate.

Is the proposed "remote" disclosure threshold appropriate and consistent with the language in Section 401(a) of the Sarbanes-Oxley Act? If not, how should we change it?

We believe that the proposed "remote" disclosure threshold is neither appropriate nor consistent with the language on Section 401(a) of the Sarbanes-Oxley Act (Act). We would strongly recommend maintaining the current "reasonably likely" disclosure threshold as this well-established requirement provides management the ability to properly evaluate the likelihood and impact, and therefore the disclosure, of such arrangements.

The Act requires the disclosure of all off-balance sheet arrangements that "may have a current or future material effect on the registrant's financial condition, changes in financial condition, results of operations, revenues or expenses, liquidity, capital expenditures or capital resources." Item 303 of Regulation S-K sets forth the requirements for disclosures about "Liquidity" and "Capital Resources," as follows:

(1) Liquidity. Identify any known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the registrant's liquidity increasing or decreasing in any material way.

(2) Capital Resources. Describe any known material trends, favorable or unfavorable, in the registrant's capital resources. Indicate any expected material changes in the mix and relative cost of such resources. The discussion shall consider changes between equity, debt and any off-balance sheet financing arrangements.

While we agree that there has been significant latitude taken by companies in the historical disclosure of off-balance sheet arrangements, the events of the past two years combined with the viewpoints detailed in FR-61, Commission Statement about Management's Discussion and Analysis of Financial Condition and Results of Operations, has, in our opinion brought a renewed focus by management on the potential exposures of off-balance sheet arrangements. As proposed, the "remote" threshold establishes the potential to disclose an indeterminable amount of transactions. Management is better able to determine if an arrangement is reasonably likely to have a material effect on the entity and therefore be in position to sufficiently describe the nature and exposures relating to the off-balance sheet arrangement. Lowering the threshold to "greater than remote" will require management to consider an immeasurable number of potential events in order to assess whether a material effect from the off-balance sheet arrangement is remote and therefore not required to be disclosed. The current "reasonably likely" threshold provides management with consistent application guidance for disclosure in MD&A and conforms to the Act in disclosing off-balance sheet arrangements that "may" have a material current or future effect on an entity.

Also, from a practical perspective, we fear that a "remote" threshold may encourage management to disclose all arrangements in order to avoid potential second-guessing about remote and greater-than-remote. We fail to see how the investor would be well served by this requirement. Furthermore, the collection and assessment of the entire population of such items under a remote risk standard for a large multinational company is highly impracticable. We currently have many contracts in our research operations that have liabilities, which are contingent on milestone successes of the research. Trying to ascertain whether such payments might need to be made based upon the success of the research being greater than remote is not possible as we cannot predict the outcomes of pharmaceutical research at early and sometimes at much later stages.

Would it be appropriate under the language in Section 401(a) of the Sarbanes-Oxley Act to apply the "reasonably likely" disclosure threshold applicable elsewhere in MD&A to disclosure about off-balance sheet arrangements? If so, should we adopt the "reasonably likely" standard for disclosure of off-balance arrangements?

Yes. We strongly recommend maintaining the current "reasonably likely" requirement as this well-established threshold provides management the ability to properly evaluate the likelihood, and therefore disclosure, of such arrangements. We believe that requiring disclosure of off-balance sheet arrangements when the likelihood of either an event's occurrence or the materiality of its effect is "greater than remote" will result in requiring practically all off-balance arrangements to be disclosed. We fail to see how the investor would be well served by this requirement.

See additional comments above.

Would the application of the disparate disclosure threshold proposed to apply to disclosure of off-balance arrangements, in comparison to the "reasonably likely" standard used elsewhere in MD&A, attribute undue prominence to information about off-balance sheet arrangements in relation to other significant information?

Yes. We are concerned that the proposed requirements will likely add confusion to readers rather than achieve transparency. In fact, providing too much information may obscure important information rather than increase transparency as readers may decide to skip the entire section rather than "wade through" the resulting information. Again, we are concerned that if the volume of information is too high or dense, readers are unlikely to focus on what the important off-balance sheet arrangements are and why they need to understand the potential impact of these arrangements to the financial statements. Applying a consistent "reasonably likely" threshold will also focus the investor on the more likely exposure, otherwise an investor is probably poorly served by the majority of items, many of which will prove in the end to not be material.

Under the current "reasonably likely" threshold for disclosure in MD&A of information that could have a material effect on the financial condition, changes in financial condition or results of operations, companies carefully evaluate the specific factors related to their transactions and evaluate, and in certain circumstances with specific legal advice, the likelihood of the impact of the arrangement. We believe that helping readers understand the potential impact from off-balance sheet arrangements is important, but the potential impact from such arrangements should not be derived from a lower threshold and therefore given greater prominence either in its determination or presentation.

Should we consider amending current MD&A rules to lower the existing "reasonably likely" disclosure threshold to be consistent with the threshold in the proposals?

No. Based on the factors outlined above, we believe the current MD&A rules should not be lowered from the "reasonably likely" threshold.

Not necessarily. Capturing all risks using a "greater than remote" threshold is not likely to assist in comparisons, as the volume of information will be too great. Applying a consistent "reasonably likely" threshold will also focus the investor on the more likely exposure, otherwise an investor is probably poorly served by the majority of items, many of which will prove in the end to not be material.

Is there any basic information not required by the proposals that would be necessary to understand a registrant's off-balance balance sheet arrangements? If so, what additional disclosure should be required?

We believe that the proposed information required to be disclosed is appropriate.

Do the proposals provide enough flexibility to companies to fully and clearly describe their off-balance sheet arrangements? Would a more flexible approach, such as the current MD&A requirements for liquidity and capital resources, result in better disclosure?

We strongly support flexibility in MD&A disclosures. We believe that management is responsible for the fair presentation of financial results, and, within certain limits, we support management flexibility. We believe that the current MD&A requirements for liquidity and capital resources are sufficient and could be applied to off-balance sheet arrangements.

Is there any management analysis not required by the proposals that would be necessary for an investor to gain an understanding of the magnitude and proximity of risk exposures and financial impact of a registrant's off-balance sheet arrangements? If so, what additional disclosure should be required?

We believe that no additional disclosures are necessary.

The SEC solicits comments on contractual obligations and contingent liabilities and commitments:

Should we require the proposed table to be accompanied by additional narrative disclosure regarding liquidity and capital resources above and beyond that which already exists in MD&A?

We believe that the disclosures, provided pursuant to FR-61 and as proposed, provide clear and concise disclosure about an entity' contractual obligations and contingent liabilities and commitments. Incorporating additional narrative disclosures would not necessarily add to the information provided and, such additional disclosures are not prohibited if management deems them necessary and/or appropriate.

Should we adopt definitions of "contractual obligations" and "contingent liabilities or commitments"? If so, what should they be?

We believe that definitions of contractual obligations and contingent liabilities or commitments should be adopted to further clarify the expected transactions expected to be included (and excluded) from the disclosure requirements. The definitions should be derived from, if not identical to, the definitions outlined in SFAS No. 5, Accounting for Contingencies.

To avoid potential abuses and to promote comparable disclosure among companies, should we include an instruction to the table that would limit the extent to which a registrant may adapt the table to its particular circumstances? If so, what limits should we impose?

We believe that an entity that discloses contractual obligations and contingent liabilities and commitments should be provided the flexibility for determining the categories of obligations for the tabular disclosure suitable to its business.

Should the proposed rules state that no disclosure is required with respect to the issuance of notes, drafts, acceptances, bills of exchange or other commercial instruments with a maturity of one year or less issued in the ordinary course of the registrant's business?

Yes.

The SEC seeks comment on the presentation of proposed disclosure:

Should we require the proposed disclosure to be presented in a separate MD&A section or should it be integrated into other closely related MD&A discussions of financial condition, changes in financial condition, results of operations and liquidity and capital resources?

We believe that the location in MD&A for disclosures relating to off-balance arrangements and contractual obligations and contingent liabilities and commitments should be left to the discretion of management.

To facilitate the layering of MD&A, should we amend the MD&A rules to require separate captions for the required discussions of results of operations, liquidity and capital resources?

We believe that the location in MD&A for disclosures relating to off-balance arrangements and contractual obligations and contingent liabilities and commitments should be left to the discretion of management.

The SEC seeks comment on other MD&A disclosure:

Should we further amend the MD&A rules to require more specific disclosure about liquidity and capital resources? If so, what specific disclosure items should we include?

The current requirements regarding disclosures about liquidity and capital resources, when combined with the reasonably likely threshold, are sufficient and provide management clear and concise guidance. We do not believe additional disclosure requirements are necessary.

Should we further amend the MD&A rules to require more specific disclosure about relationships and transactions with persons or entities that derive benefits from their non-independent relationships with the registrant or the registrant's related parties? If so, what specific disclosure items should we include?

We believe the proposed definition of an "off-balance sheet arrangement" in combination with the existing requirements in Item 404 of Regulation S-K regarding related parties, will capture transactions entered into with related parties not currently disclosed in the financial statements. Therefore, we do not believe that more specific requirements are necessary.

Should we codify the factors that we identified in our January 2002 Commission statement for management's consideration in identifying the trends, demands, commitments, events and uncertainties that require disclosure with respect to liquidity and capital resources? Are there other factors that should be included in such a codification?

We believe that codifying the factors identified in the January 2002 Commission statement for management's consideration in identifying the trends, demands, commitments, events and uncertainties that require disclosure with respect to liquidity and capital resources would provide management with additional specific guidance from which to determine the likelihood of the transactions or events could have on an entity's liquidity and capital resources.

The SEC seeks comment on the application of the proposals to foreign private issuers:

Should we apply the proposed rules to foreign private issuers' annual reports on Form 20-F or 40-F, as proposed? Or should we exempt these private issuer annual reports from the scope of the proposed rules? If so, why?

We believe that investors should benefit equally from the expanded transparency of off-balance sheet arrangements disclosure by foreign private issuers as with U.S. domestic issuers and, therefore, the proposed rules should apply to Form 20-F or 40-F filing companies.

Should we exempt Form 40-F, the MJDS annual report filed by qualified Canadian issuers, from the scope of the proposed rules? If so, why?

We believe that Canadian issuers should not be exempt from the proposed rules and that investors should benefit from the expanded transparency of off-balance sheet arrangements disclosure by U.S. domestic, foreign private and Canadian issuers.

If we should require foreign private issuers to provide some expanded disclosure regarding off-balance sheet transactions and other similar items in their annual reports, should we adopt rules that apply different standards for foreign private issuers compared to the standards adopted for domestic issuers but that would be consistent with the Sarbanes-Oxley Act? If so, what standards would you substitute for the proposed rules?

We do not believe that the disclosure requirements for foreign private issuers for off-balance sheet transactions should be based on different standards than for U.S. domestic issuers.

Should we exempt Form 6-K reports from the scope of the proposed rules, as proposed? Or should we apply the proposed rules to Form 6-K reports that include quarterly financial statements?

We do not believe that the disclosure requirements for foreign private issuers for off-balance sheet transactions should be based on different standards than for U.S. domestic issuers.

Should the proposed safe harbor be expanded to apply to all forward-looking information in MD&A, regardless of whether the information relates to off-balance sheet arrangements?

We believe that the safe harbor rules should be expanded to apply to all forward- looking information in MD&A.

Is there any need for the proposed safe harbor, or would the statutory safe harbors afford sufficient protection to encourage the type of information and analysis necessary for investors to understand the impact of off-balance sheet arrangements?

Is the additional information elicited by the proposals useful to investors, other users of company disclosure and readers of a company's financial statements? If not, how can it be improved to achieve that goal?

We believe that the additional information regarding off-balance sheet arrangements and contractual obligations and contingent liabilities and commitments is useful to readers.

In addition to the requirements we propose, are there particular aspects of off-balance sheet arrangements, contractual obligations and contingent liabilities and commitments that the proposals should specifically require companies to address? If so, what are they?

No, we believe that there are no additional aspects of off-balance sheet arrangements, contractual obligations and contingent liabilities and commitments that should be addressed.

If the proposed disclosure would involve competitive or other sensitive information, are there any mechanisms that would ensure full and accurate disclosure while reducing a company's risk of competitive harm?

We believe that there is the possibility of competitive harm that might arise from the Commission's proposal. For example, we do not believe that investors would be served by disclosing strategic alliance terms as such alliances can be competitive advantages and might also be used by competitors against the company disclosing the information if both are bidding for a new strategic partner. We encourage the SEC to be flexible in this process and permit a company to appeal to the SEC for specific exemptions should the need arise. This exemption process could mirror the request for confidential treatment process.

In addition, we believe the proposed disclosures could subject an entity to competitive harm because, as presently defined, the "remote" threshold will encompass substantially all off-balance sheet arrangements for disclosure as management would not be able to reasonably estimate that the potential exposure resulting from such arrangements would not be remote. As previously stated, we recommend maintaining the current "reasonably likely" requirement of MD&A as this is well established threshold provides management the ability to properly evaluate the likelihood, and therefore disclosure, of such arrangements.

Are there other aspects of the proposed disclosure that should be retained while other parts of the proposed disclosure are eliminated? We solicit comment on the desirability of adopting some sections of the proposed rules, but not all sections.

We believe that the information required by the proposed rules ,as amended, are proper and provide readers the opportunity to understand the potential risks and benefits associated with an entity's financial condition, changes in financial condition, results of operations, revenues or expenses, liquidity, capital expenditures or capital resources.

The SEC solicits quantitative data to assist their assessment of the benefits of identifying off-balance sheet arrangements and analyzing their effects on the financial statements and preparing a table of contractual obligations and contingent liabilities.

The SEC seeks comment on the potential costs of the proposed rules:

What type of expenses would companies incur in order to comply with the proposed disclosure requirements?

We believe that significant legal, accounting and internal costs will be incurred in order to comply with the proposed disclosure requirements. In many cases, companies will need to set up systems to deal with such disclosures as "off-balance sheet" collection mechanisms do not exist. Further, there will need to be education of all members of the company to ensure an understanding of these types of transactions and that they are accurately reported and that the relevant "greater than remote" standard is understood.

What would the average printing and dissemination costs be for each firm?

No comments.

SEC solicits quantitative data to assist their assessment of the compliance costs of identifying off-balance sheet arrangements and the table of contractual obligations and contingent liabilities and commitments in the manner proposed.

We estimate the cost of compliance with the proposal as written at a couple of million dollars for a large, multinational company.

The SEC seeks comment on the effects on efficiency, competition and capital formation:

Comment requested on the degree to which the proposed disclosure requirements would create competitively harmful effects upon public companies, and how to minimize those effects.

We believe that there is the possibility of competitive harm that might arise from the Commission's proposal. But, we encourage the SEC to permit a company to appeal to the SEC for specific exemptions should the need arise. This exemption process could mirror the request for confidential treatment process.

Comment requested on any disproportionate cross-sectional burdens among the firms affected by the proposals that could have anti-competitive effects.

No comments.

Comment requested on how the proposed amendments, if adopted, would affect efficiency and capital formation.

No comments.

The SEC seeks comment on the number of small entities that would not be required to comply with the proposal because they do not engage in off-balance sheet arrangements and whether the relative preparation costs for small entities would be lower than for larger entities.

No comments.

The SEC seeks comments regarding the number of small entities that may be affected by the proposals; the nature of the potential impact of the proposals on small entities; and now to quantify the impact of the proposed revisions. Commenters are asked to describe the nature of any impact and provide supporting data.